MortgagesMortgages allow homeowners to break-up the cost of a home into payments distributed over a certain amount of time. In order to do this, the homeowner must pledge their property as collateral to a third party (the lender) and pay interest until the home loan taken out to purchase the house is paid off. The borrower can use a mortgage calculator to formulate a payment plan using current interest rates, the loan amount, and payback time frames.
Mortgage rates are the level of interest a borrower is paying on their mortgage. Paying close attention to mortgage rates is important for both those looking to buy a home and those who already have a mortgage. For those in the market to buy real estate, the best time to secure a mortgage with a lower monthly payment is when interest rates are low. Those with a mortgage should consider refinancing in order to consolidate debt and reduce monthly payments when interest rates are reduced. A mortgage calculator will show you how a drop in interest rates will affect your monthly payments and payment terms should you choose to refinance, or if the time is right to buy a home.